Regionalisation trends in Russia: Between the Soviet Legacy and the Forces of Globalisation...

Geopolitics, Vol.9, No.2 (Summer 2004) pp.1–36PUBLISHED BY FRANK CASS, LONDONDOI: 10.1080/14650040490442890

Regionalisation trends in Russia: Between the Soviet Legacy and the Forces of Globalisation

JERONIM PEROVIC

Regionalisation in Russia is to be understood as part of the overall transformationprocess. It is argued that while the form of regionalisation during the Yeltsin era after1991 presented an image of democratic legitimacy, it was still largely based on thesame structures and characteristics as the ‘regionalism’ that took shape during theSoviet era. In this context, the real significance of Putin’s federal reforms is to be seenin the fact that a number of the faults in this essentially Soviet system have been laidbare and challenged. Thus, Putin’s reforms are not to be dismissed as a purely adminis-trative measure to strengthen central state power and control. Instead, they constitutean attempt to eliminate this form of regionalism in order to build a more favourablebasis for Russia’s integration into global economic contexts and structures. The factthat Russia is moving in this direction is not, however, solely attributable to Putin’sfederal reforms. There is a wide and diverse range of other factors propitious to thiscourse.

Introduction

Assessments of regional developments in Russia are often as diverse as Russiaitself. Western and Russian observers alike tend to perceive and portrayregional processes in Russia in extreme terms. Whereas, during the Yeltsinera, the focus had been on the risk of separatism, to the point where even thepossibility of the collapse of the national state had been raised on severaloccasions, under Putin, regional issues have been seen as the reverse of thatsituation. The discussion is now centred not on the possibility of a collapse,but on the issue of whether, and to what extent, a recentralisation of powermight lead to a complete removal of regional autonomy. This one-sided focus –also portrayed by Western media – on the possibility of a collapse of the stateon the one hand, and a Soviet-style centralisation on the other, has not only ledto a distorted perception of regional processes in Russia, but also divertedattention from the much more important issue of the actual nature of thisphenomenon of regionalism and the forces driving the regionalisation process.

Jeronim Perovic, The Davis Center for Russian and Eurasian Studies, Harvard University,Cambridge, MA, USA. E-mail: <[email protected]>

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There is no lack of analyses of specific aspects of regionalism in Russia.Since the mid-1990s at least, regionalism research has enjoyed considerablepopularity, both in the West and within Russia. Many Russian universitiesnow teach regionalism research under the name of ‘political regionology’, as asub-discipline within political science. Political regionology is concernedmainly with current political developments within Russia, linked in one wayor another to the issue of regionalism. Political regionology addresses issuesas diverse as the theoretical and practical aspects of federalism, the centre–periphery relationship (including budgetary relationships), the right of self-determination at national and regional levels, the regional policy of the federalgovernment, regional political processes in the regions themselves (politicalinstitutions, elites, political parties, economic lobby groups, etc.) or the problemsrelating to the establishment of more efficient and democratically legitimisedstructures for local self-government.1

In spite of the extensive discussion of specific aspects of regionalism – tothe point where some issues are already exhaustively covered – there is stillvery little clarity as to the phenomenon as a whole. This was highlighted inparticular by the conflicting assessments of Putin’s federal reforms introducedin early 2000. The first striking feature was the fact that most commentatorshad not expected Putin to be able to implement his reform project to strengthencentral state authority with so few problems, in the face of opposition frommany governors and republic presidents. Impressed by Putin’s rapid success,many observers then predicted a comprehensive centralisation of power and acontraction of regional autonomy to a bare minimum.2 Comments in summer2000 even referred to a veritable ‘capitulation’ on the part of the politicalelites in Russia’s 89 regions (the so-called ‘subjects of the Russian Feder-ation’ in the Russian terminology).3 Finally, the experts had to conclude thatthe changes were ultimately somewhat cosmetic in nature. The influence ofthe regions in national policy had indeed been reduced, and the shattered prestigeof the centre had been largely restored (as seen in the relatively large measureof success achieved with the standardisation of the legal system throughoutthe territory4). No comprehensive recentralisation had in fact taken place,however, and it became evident that after the recentralisation phase in 2000,the pendulum had again started swinging back in the opposite direction.5

One reason for this lack of certainty in the assessment of the federalreforms can be seen in the fact that the resources available to the centre wereoverestimated on the one hand, and the strength of regional power arrange-ments was underrated on the other. On the basis of the widely held viewamong Russia experts in theWest that Russia’s (formal) political institutionswere generally weak, many observers assumed at the start of the reforms inearly 2000 that no effective restrictions would stand in the way of the poweraspirations of a head of state encouraged by a ‘super-presidential’ system, and


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that political events could therefore be manipulated by the holders of power inthe Kremlin virtually at will.6 This view, however, clearly underestimated thesignificance of informal institutions and networks within the regions, whichproved strong enough to protect the system of Russian federalism against theattack from the centre.7 Even if Putin’s innermost preference was to be ableonce again to rule the country from the centre, it is now quite clear that theKremlin does not have the means or resources to exert direct influence onevents in the various territorial entities.

While Putin’s reforms did not succeed in overturning the system of federalrelationships, since his arrival on the scene a series of developments havetaken place in the regional landscape that could be of considerable signifi-cance for political processes in Russia. Rather than the end of regionalisation,the Putin era is characterised by the beginning of a new form of regionalisa-tion. The main issues addressed in this article are therefore as follows: whatare the forces driving regionalisation processes in Russia? What form ofregionalism has emerged in Russia, and what are its distinguishing features?Where is this process going, and what will Putin’s reforms mean for the futurecourse of regionalisation?

This discussion sees regionalisation as part of the overall transformationprocess, which, in general terms, faces a twofold challenge, from the Sovietlegacy on the one hand, and influences from the international and trans-national environment on the other.8 These conflicting forces of the Soviet legacyand globalisation impact on the actors and institutions in Russia; they form thecontext for the organisation of the Russian territorial space, the definition ofthe relationships between the centre and the regions, and the distribution ofpower within the regions. Policies formulated at the federal centre can favourone or the other trend of regionalisation, but have little ability to exert anydirect or decisive influence on the process as a whole.

It is argued that while the form of regionalisation during the Yeltsin eraafter 1991 presented an image of democratic legitimacy, it was still largelybased on the same structures and characteristics as the ‘regionalism’ that tookshape during the Soviet era, namely, asymmetric bilateral relationshipsbetween the centre and the country’s 89 federal entities, an informal andpersonalised system of power and exchange relationships between the actorsat the centre and in the periphery, and a monopolisation of power withinRussia’s individual federal entities. In this context, the real significance ofPutin’s federal reforms is to be seen in the fact that a number of the faults inthis essentially Soviet system have been laid bare and challenged.

Thus, Putin’s reforms are not to be dismissed as a purely administrativemeasure to strengthen central state power and control. Instead, they constitutean attempt to eliminate this form of regionalism, seen as holding back theprocess of Russia’s modernisation, in order to build a more favourable basis


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for Russia’s integration into global economic contexts and structures. The factthat Russia is moving in this direction is not, however, solely attributable toPutin’s federalist reform programme – for example, his efforts to peg backregional influences on national policy and to harmonise the legal systemthroughout the country. There is a wide and diverse range of other factorspropitious to this course, such as an increasing pluralisation of actors at aregional level, the strengthening of the structures of local self-government andthe penetration of Russia’s big business into the Russian regions.

Region, Regionalism, Regionalisation

For the sake of clarity, it may be useful to define a number of central terms atthis point. Before embarking on a discussion of ‘regionalism’, it is essential tohave a clear understanding of the complex term of ‘region’. The Russian wordregion is a non-specific term, referring to any geographical entity, from avillage up to entire continents. In the concept of Russia’s regional policy,promulgated as an ukaz by President Boris Yeltsin on 3 June 1996, ‘region’ isdefined as ‘a part of the territory of the Russian Federation characterised byshared natural, socioeconomic, ethnocultural and other features. A region maycoincide with the boundaries of an entity [‘subject’] of the Russian Feder-ation, or comprise several territories of entities of the Russian Federation.’9

The academic literature also refers to the subjective and social componentof the concept. The critical point here is that the concept of ‘region’ is not merely adefinable part of the earth’s surface, but is also constituted by social phenom-ena comprising other dimensions beyond the spatial. Thus, to a significantextent, a region is defined by the awareness of all or part of the population ofbeing part of a regional community.10 In this article, unless otherwise stated,the term ‘region’ will refer to one of the 89 administrative entities of theRussian Federation, referred to in Russian as ‘subjects of the RussianFederation’.11

Just as there is no one precise definition of ‘region’, academic literaturealso provides no single definition of ‘regionalism’. This concept is largelypractice based, formulated by the social forces involved. Accordingly, ratherthan being discussed in overall general terms, regionalism is always to be con-sidered in a specific individual case – in this instance Russia. In general terms,‘regionalism’ could be understood as referring to all political movements andmodes of action based on the specific interests of the population or strata ofthe population in a particular region, with the region forming the frame ofreference as a largely homogenous component of a political entity.12

The specialist literature frequently blurs the distinction between ‘regional-ism’ and ‘regionalisation’. Whereas ‘regionalism’ denotes a political move-ment, which could not exist in the absence of support groups within the



society, ‘regionalisation’ refers to a process. In very general terms, ‘regional-isation’ denotes the power shifts arising from the devolution of powers andresponsibilities among different regional entities.

Soviet Legacy and Regionalisation

In order to understand the regional processes taking place in the 1990s, it isnecessary to review regional developments towards the end of the Soviet era.It is likely that, precisely because of the excessive centralism in political andeconomic structures, cracks were already beginning to appear within theSoviet monolith by the 1960s. The party leadership was no longer able to meetthe demands of an increasingly complex economic structure with the methodsof a central command-based economy.13 As a result of this trend, there was aloosening of power structures, with individual authorities and production unitsgaining more autonomy. In the 1970s and 1980s, the party elite delegated allits fundamental powers to the administrative and regional elites – on the con-dition that they supported the central party leadership and the official line.14

This period also saw the formation of a regional elite, which increasinglybegan to approach the centre with specific economic concerns and demands.

An instructive illustration of the manner in which regions emerged in thecontext of totalitarian structures can be seen in the characterisation of theSoviet system in the early 1990s by economists and political scientists asan ‘administrative market’.15 The administrative (or bureaucratic) marketdescribes an interaction zone in which a negotiation process takes placebetween organisations and individuals on various levels for the distribution ofboth material and intangible goods and services. The struggle for the distribu-tion of resources was manifested both vertically, in the relationships betweenthe levels of state authority, and horizontally, between the various regionaland local institutions (including both the state structures and the party oreconomic structures in a given region).16

The increasing weakness of the extensive Soviet development model,however, meant that the regions were growing more and more into the role ofindependent entities, focusing solely on their own regional needs. In order tomeet the challenges of a diversified economy, these entities at sub-nationallevel were required to formulate their own plan targets and communicate themto the next highest level of the hierarchy. The targets were then handed backdown as production and development demands. The same applied to enter-prises seeking material and resources. The number of plan targets dictated bythe centre progressively declined in favour of targets formulated at the lowerlevels for submission to the administrative hierarchy. The regions wereincreasingly approaching the centre with specific political, economic andcultural requests. The interaction between the centre and the regions was to an


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ever larger extent determined by this process of negotiating the distribution ofpower and resources.17

Nor were Brezhnev’s recentralisation measures able to hold back the basictrend towards the region becoming more important as a major actor within the‘administrative market’.18 Lobbying and the negotiation process becameintegral components of the relationship between the centre and sub-nationalentities. Operating via the ministries responsible for regional policy or directpersonal contacts with the centres of power, the regions endeavoured to influencethe distribution of resources (direct investment, allocations of tax revenue andgoods, development programmes, etc.) in their favour.19

In line with the practice of ‘bureaucratic negotiation’, Soviet regionalpolicy was demonstrably characterised by arbitrariness and a lack of balance.The two most important goals of Soviet regional policy – to maximise eco-nomic growth and level out the major economic inequalities between theregions – were difficult to reconcile. In practice, privileged treatment wasgiven to regions where strategically important economic sectors were based,and those which had extensive natural resources.20

The regional elites were a particular element of the administrative market,and indeed it was during the Brezhnev era (1964–1982) that the concept of aregional elite emerged.21 The onset of the transition process in Soviet societyfrom ‘totalitarian elite to segmented elite’ dates back to this time.22 Brezhnev’spolicy was focused mainly on maintaining the status quo and the stability ofthe system. In terms of the allocation of political posts, this was reflected inthe fact that party first secretaries, once appointed in a particular region,would generally remain in that position for decades. As long as they remainedloyal to the centre, and provided central party priorities, for example regardingnominal fulfilment of the economic plan, were respected, the party would givethem a largely free hand in the formulation of policy in their respectiveregions. As a result of this practice, regional leaderships increasingly identifiedwith the interests of their regions, equating their own personal advancementwith progress in their regions.

In practice, power was concentrated in the hands of a few members of aregional nomenklatura, comprising high-level representatives of the party andthe executive committee of the local soviets. The regional elite also included thecategory of regional industrial managers – some of whom wielded considerableinfluence – even though in most cases they were nominally subordinate to thecentre rather than the regional leadership.23 However, the regional leadershipwas responsible for plan fulfilment in their territorial ‘patch’, and accordingly theyoften exerted control in the form of interventions in the activities of regionaleconomic sectors.24 The latitude given to local party chairmen led in somecases to the formation of Mafia-like party structures in the regions. Decisionswere increasingly dictated by the personal interests of top officials.25



The regional elite formed a powerful lobby, but without ever consolidatinginto a cohesive unit. Individual regional leaders typically saw their primaryrole as being to secure the allocation of the maximum funds and resources fortheir own region, and to reinforce their position in their respective territories.Their success in doing so depended mainly on the ability of regional represen-tatives to exert direct, personal influence on Moscow party headquarters. Themost influential regional players within the RSFSR were the two largest cities(Moscow and Leningrad), strategically important regions dominated by defenceindustry (in the Urals), or some of the resource-rich regions in Siberia or theFar East. As popular summer resort locations for top decision makers in Moscow,the Crimea and Northern Caucasus regions enjoyed an especially privilegedstatus within the USSR, on the basis of these close ties with the centre.26

The aim of the regional elites was not that of overturning the existingsystem. Regional party first secretaries had a dual role. On the one hand, asMoscow’s representatives they were expected to advance the interests of thecentre. On the other, they were committed to the success of their region. Whentheir loyalty to the centre could not be reconciled with the interests of theregion, this could lead to conflict with the centre, although the ultimate out-come was generally the dismissal of the regional chairman.

It was only the Gorbachev reforms, particularly the elections for soviets atall state administration levels instituted by him, which enabled the regions tobreak out of this predicament. The concealed regionalisation process now con-tinued as an openly avowed policy. The first free, open elections in the historyof the country led to the end of the Communist Party’s monopoly on power,severing what was to all intents and purposes the major link between the centreand regions – the party command structure.

Thus, the unprecedented historical development was not regionalisation assuch, but rather the fact that at the beginning of the 1990s, for the first time inthe history of Russia, regionalisation was democratically legitimised. Incontrast with the situation in the Soviet period, this created the conditions forthe actors at the periphery to be able to negotiate and articulate their interestsvis-à-vis the centre. After elections in 1991, even though regionalism wasplaced on a democratically legitimate footing in terms of form, regionalism inRussia essentially remained Soviet in nature, as regards both the structure ofthe relationships between the centre and the regions, and the organisationalstructure of power within the individual regions.

Globalisation and Regionalisation

Globalisation and regionalisation are the two principal trends impacting onstates in the current international environment. As well as denoting a processof accelerated political and cultural integration, globalisation is also seen as


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favouring the aspirations of sub-national entities and communities to takecontrol of their own destinies. Thus, the participation of a country in global-isation processes implies not only a basic minimum of local autonomy andparticipation in political decision making, but also a certain level of socialpluralisation. According to current thinking, these two forces will have anongoing impact on future international trade and capital flows, the processof decentralisation and the development and functional determination ofcities.27

According to this view, the future belongs to those states that are able tomeet the global challenge by establishing a healthy balance between inter-national and local conditions. If this goal is not achieved, they run the risk ofbeing overtaken by events and ‘capsized’. Joseph Stiglitz, former chief eco-nomist and vice president of the World Bank, once summarised it thus:

Globalization is like a giant wave, that can either capsize nations orcarry them forward. Successful localization creates a situation wherelocal entities and other groups in society – the crew of the boat if youwill – are free to exercise individual autonomy but also have incentivesto work together.28

While economics is the primary force driving globalisation, this does notreduce the significance of politics. Indeed, politics becomes even more importantin this context. The central question to be answered in the age of ‘glocalisation’is a political one: how can a country attract mobile specialists or wealth-creatingbusiness activities and work with them to achieve the highest level of nationalproduction? The task is to increase the political empowerment of the principalactors, i.e. within both the (national) state and sub-national entities. The immobileinhabitants of local agglomerations must have sufficient political autonomy tocompete with other locations, in order to create the required conditions to beparticularly attractive to at least some mobile factors.29

In this context, traditional attributes such as population, territorial size,natural resources or military power will play an ever-diminishing role.30 Facedwith a situation of rapidly increasing economic interdependency, states aresubject to enormous pressure to adapt and adjust to the new conditions. Thedissolution or increasingly ‘permeable’ nature of existing borders and the lossof what were once exclusive preserves of state authority are to be seen not asmarking the end of the state, but rather of a change in its functions and theconditions in which it operates. In the established democracies of the West,the state is now perceived more and more by its citizens and the businesscommunity as a service provider. The legitimacy of the state and its policies isfounded on its role as a provider of public ‘goods’ such as law, education,welfare, security and, not least, its function as a negotiator and representativeof national interests in a global communication context.31



Globalisation and regionalisation are complementary rather than mutuallyexclusive concepts. However, these terms are used differently in WesternEurope and Russia. Discussion of ‘regionalisation’ in Europe now refersprimarily to the amalgamation of states into larger communities. ‘Localisa-tion’ is the term now increasingly being used to describe political movementsat the sub-national or local level. Particularly in Western Europe, where thestrongest trend is that towards integration, efforts are being made to balancethe centralisation effect of supranational institutions by strengthening sub-national state structures. This is not, however, solely the result of a new economiclogic, but also a product of a political commitment to forestall the erosion ofdemocracy potentially resulting from the delegation of powers and competen-cies to supranational structures.

Whereas in Western Europe debate has centred around forms of integra-tion of states into supranational structures and the issues this raises, for thestates in the post-Soviet area – including Russia – the central issue has beenhow to counter the consequences of the global changes that have taken placesince 1991, which they see as negative. During virtually all of the 1990s,Russia was exposed to the forces of globalisation and regionalisation withoutany significant opportunities for central state political structures to actively impacton and control those processes. Accordingly, in the broadest terms, Russia’sattitude towards globalisation and regionalisation can be described as a policyof ‘damage limitation’. In the case of globalisation, i.e. the opening up ofmarkets, Russia’s concern was to counter to the maximum extent possible theincreasing damage to its industrial production, while in the regionalisationcontext, the objective was to prevent the worst-case scenario – the disintegrationof the country – from becoming a reality.

Ultimately, then, Russian regionalism primarily represented a response tothe lack of central state control mechanisms available, in order to counter theabove-mentioned negative trends. Regionalism was an attempt to compensatefor the power vacuum at the centre by means of initiatives at the periphery, inorder to stabilise the situation in the regions. In the foreground, from the out-set, were efforts by the regional elites to control the region’s own resources,and their demands to be able to make economic policy decisions autonom-ously, on the basis of regional interests. This became the basis for regionalambitions for greater autonomy and a greater degree of federalisation of therelationships between the centre and the regions. This form of regionalismcontributed to Russia’s success in withstanding the difficult crisis years, andindeed was clearly its major achievement.

As a transitional solution, Russian regionalism in the form establishedunder Yeltsin certainly served its purpose. In the longer term, however, thissystem was incompatible with the requirements for ongoing modernisationsteps and the integration of Russia into the global economy. Essentially, the


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regionalisation process taking place in the 1990s did not follow any economiclogic of globalisation; the arrangements between the centre and the regionsand the formulation of policy within individual regions were a consequenceof political processes and power constellations at the end of the Sovietperiod.

The regional elites who gained power after 1991 based their efforts tobuild up and consolidate political and economic structures on a traditionalunderstanding of sovereignty. Associated with this was the desire to have(to the maximum extent possible) absolute and indivisible control ofresources and the population within a clearly defined territory. This processwent so far that many regions – and not just ethnically defined republics –emphasised their ‘statehood’ by introducing special symbols (flags, consti-tution, introduction of regional ‘state citizenship’ and a ‘state language’),and even started to set up payment and trade barriers at the external bordersof their territories, as a way of protecting their own markets. Fundamentalconcepts such as ‘territoriality’ or ‘sovereignty’, which had traditionallycharacterised the state, but which had become less significant as a resultof economic and social globalisation processes, were still very muchlive issues for many sub-national entities in Russia, even in the age ofglobalisation.32

It was quite clear that this policy carried an inherent danger of separatism,and in the longer term would be likely to have devastating consequences foreconomic development in many regions of Russia. Indeed, it was specificallyto avert the danger of regionalism that the regions of the Russian SocialistFederative Republic had not been designed as independently operatingeconomic units. On the contrary, the approach had been to allocate eachregion a specific function within the macroeconomic complex of the SovietUnion. Accordingly, certain regions were typically associated with particularattributes. Thus, Orel was an ‘agricultural’ region and Ivanovo a ‘textile-processing’ region; Leningrad was ‘industrial’, and Tyumen was referred as a‘petroleum-processing’ region.33

The collapse of the unified economic area destroyed this system based on aregional division of labour. This in turn placed a number of regions in a diffi-cult situation, since their economies were strongly focused on specific sectors,making them very dependent on the economic infrastructure of the country asa whole. At present, there are about a dozen regions with a relatively favour-able economic structure and a certain level of export capacity, enabling themto stand as economic entities in their own right in the national and inter-national environment.34

Thus, the essential characteristic of economic globalisation processeswithin Russia was their uneven nature, since only a small proportion of theregions were able to integrate into the international economy. According to



First Deputy Chairman of the Federation Economic Policy Committee ofRussia’s Federation Council, Vladimir Gusev, only six regions are currentlyprepared for membership in the World Trade Organisation – the city ofMoscow, St Petersburg, the republics of Tatarstan and Bashkortostan, and theSverdlovsk and Perm oblasts.35 Globalisation has dramatically accelerated theprocess of socioeconomic differentiation, and Russia is probably the primeexample of an uneven globalisation process. Differences in developmentpatterns can be seen not only in the area of foreign trade links, but also in thedemocratisation process, the nature of the legal system and market economystructures, for example. For this reason, a distinction is often made in the litera-ture between various ‘types’ of political regime in the regions, ranging fromdemocratic, market economy-based regimes on the one hand, to centralistauthoritarian regimes on the other.36

The unevenness in regional development patterns is also reflected in anasymmetric system of federal relationships, characterised by numerous con-tradictions between the centre and individual regions. In view of its weakness,the centre saw itself as having to give preferential treatment to regions withhigh economic potential (as raw materials areas), or which were of majorpolitical or geostrategic significance for the country. This policy, based ondamage limitation, led to the principle of ‘buying’ the loyalty of the regionswith concessions to regional demands, even though that policy underminedefforts to create a uniform economic and legal environment, and also signifi-cantly increases regional imbalances. Yet this approach did allow the unityof the country to survive the difficult transitional phase. An expression ofthis type of policy can be seen in the bilateral agreements which the centrehad concluded with over half of all federation entities by the mid 1990s,with detailed demarcations of powers and competencies between the twoparties.

The Weaknesses of Yeltsin’s Regional System

A study entitled ‘On the threshold of a new form of regionalisation’, from theNizhnii Novgorod Centre for Strategic Studies of the Volga Federal District,regards the regionalism crisis in the late 1990s not least as representing thedefeat of that regional system, based on a rigid concept of sovereignty, infavour of the more mobile actors from the business and finance sectors whichoperate across regional and national borders. The study suggests that whereasthese operators have been able to adapt to the requirements of a rapidlychanging environment, regional politics have focused mainly on building upand securing power within the borders of individual federal entities. Accord-ingly, regional politicians were running economic policies which may havestrengthened their positions within the region, but took little account of the


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longer-term economic interests of the region, most of which eventuallydeclared bankruptcy following the crisis of August 1998.37

The fact that this regional system, based on 89 relatively autonomousentities, was not only difficult to control, but also economically inefficient,had been realised and also discussed before Putin’s arrival on the scene. Theefforts undertaken during the Yeltsin era were essentially aimed at the samegoals as Putin’s reforms: to create a uniform legal and economic space anddismantle the privileges that certain regions had been able to insist on intheir bilateral agreements with the centre. It was to achieve this, for example,that during Evgenii Primakov’s time as prime minister (September 1998 toMay 1999) the possibility of amalgamating regions into larger entities wasconsidered.38

All attempts made during Yeltsin’s time in office to change the regionalsystem by central state initiatives, i.e. ‘top down’, were unsuccessful, how-ever. During the 1990s, among Western observers in particular, there wasmuch discussion of the possibility that Russia could be able to regulate itselfby a ‘bottom-up’ process. This view reflected the attitude whereby Russianregionalism was seen as an expression of a democratisation process, and apriori an essentially positive phenomenon. As well as distorting the natureof the phenomenon, this view considerably exaggerated the significance ofregionalism as an integrative political force radiating out to a national level.

During the 1990s, there were some moves towards the formation ofregions by a ‘bottom-up’ approach, i.e. initiated from a sub-national level andfocusing on building horizontal links with regions in Russia and even acrossborders. For example, outside observers often expressed the view that theeight Interregional Associations for Economic Cooperation, created from thebeginning of 1990, could be a source of momentum towards a federal reorgan-isation of Russia. However, the capacity of these associations to form coalitionsproved to be very low. This can be attributed to the fact that the new, post-1991 Russia lacked not only a tradition of regional cooperation, but also thestructures which would have allowed it to take place. Instead of setting upthese structures, the regional leaders used the associations primarily to safe-guard their individual interests vis-à-vis the federal centre.39 The bilateralnature of the centre–periphery relationship and the regions’ focus on individualinterests outweighed any collective approach in Yeltsin’s time.40 Indeed, thecentre was also sceptical about the formation of regional political alliances,seeing this as potential for secession. The leadership in Moscow did every-thing it could to prevent the possibility of such alliances being formed.41

By the end of the 1990s, international links between sub-national entitiesand the outside world had been established in an variety of forms. In additionto contacts between federal entities and foreign regions, states and organisa-tions, there was a clear trend towards the formation of links also at the level of



local self-government structures (twinning and associations between cities)and cooperation arrangements between the interregional associations andinternational partners.42 International cooperation has become a strategy ofvital importance for Russia’s subnational entities, and for border regions ofRussia in particular.43 However, these trends were only just beginning at theend of the 1990s, and were far from having exhausted their potential.

Putin’s early success in implementing the federal reforms can be attributedto the fact that the shortcoming of regionalism referred to above – the mono-polisation of power within the structure of the federal entity and the regions’focus on the federal centre as its most important reference point – outweighedthe positive aspects of horizontal outreach. Ultimately, it was because of thelack of coalition commitment between the regions that the Kremlin leadershipdid not encounter more resistance during the implementation of its reformprogramme. The Kremlin was dealing not with a unified regional force, butwith a highly fragmented political phenomenon. In spite of its weakness andlimited resources, the centre was always the most important point of referencefor all the regions, rich and poor alike. Accordingly, the regions missed theopportunity for a ‘bottom-up’ federal reorganisation of the state, and allowedthe initiative for the restructuring of Russia to pass to the centre.

Putin’s Reforms: Modernisation as the Goal

On 13 May 2000, Putin issued a decree creating the seven federal districts as anew administrative structure. In his annual address to the Federal Assembly of8 July 2000, Putin said that he saw the federal districts, each of which isadministered by a representative of the president, not as an ‘amalgamation[ukrupnenie] of the regions’, but as a way of ‘expanding the structures of thevertical axis of presidential power in the territories’ and ‘increasing the effec-tiveness with which authority is exercised’.44 Simultaneously with the intro-duction of the federal districts, Putin submitted a package of three draft lawsto parliament which would trim back the authority of governors and republicpresidents and reduce their influence on national politics (particularly viathe law ‘On the restructuring of the Federation Council’ which meant that by1 January 2002, governors and regional legislative speakers had to give uptheir seats in the upper house of parliament in favour of delegates from eachregion appointed by the regional executive and legislative branches). Theselaws were all passed by the parliament in summer 2000.45

At the same time, a series of laws are in preparation, or have already beenpassed, which are designed to reinforce the position of the centre vis-à-vis theregions. Of particular importance for the relationship between the centre andthe periphery was the introduction of a new tax law on 1 January 2001, adjust-ing the distribution formula for federal tax revenue in favour of the centre.46


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On 4 January 2003, Putin introduced to the State Duma a draft bill amendingthe law on general principles for organising legislature and executive organsin the regions and the law on general principles for local self-government.47

Putin’s legislation, which, among other things, aims at a clearer definition ofareas of competence between centre and regions, in particular a specification ofthe role of the so-called power-sharing agreements between centre andregions, and at enhancing the role of local municipalities vis-à-vis the regionalorgans, could, as a comment in Izvestiya on 5 January 2003 suggested, mark thestart of one of the Putin administration’s broadest reforms of the federal system.

What is the intention behind Putin’s recentralisation measures? In thedebate that took place in the early summer of 2000, Putin had critics as well assupporters. While some saw the reforms as a return to Soviet-like conditionsof centralist and authoritarian administration, others perceived the measures asa way of dealing with the shortcomings of the federal system. AndreasHeinemann-Grüder has argued quite rightly that any assessment of Putin’sreforms remains dependent on the standpoint of the person concerned. If ademocratic yardstick is applied, the programme is authoritarian, but thereforms can be seen as positive if is agreed that the state’s ability to acteffectively and legal certainty have increased.48

Putin himself would prefer to see his initiatives as neither changing norweakening the principle of federalism embodied in the constitution, but ratheras strengthening it. Putin and his team have continually emphasised that theirprimary aim is to ensure the unhampered operation of the free market, and totear down the barriers standing in the way of that goal. And at the beginningof his term in office, the president clearly saw the arbitrary exercise of powerand legal authority by regional political elites as the greatest obstacle to theestablishment of a functional state and the modernisation of Russia.49

In the context of the Kremlin’s measures against the free media or its warin Chechnya, it came as no surprise when the view that Putin’s recentralisa-tion measures were incompatible with democratic development began tocirculate in the West and among Russian liberals.50 Many are likely to agreewith Grigorii Yavlinskii, leader of the Yabloko party, in his view that Russiahas a ‘defective’ and ‘unstable’ democracy, warning that the Kremlin’s goal isto integrate not only the media, but also all non-state organisations into a‘cooperative state’ dominated by the government.51 Nikolai Petrov, formerassociate of the Moscow Carnegie Centre, also sees the federal reforms as aneffort to widen state control over society. In Petrov’s view, not the leastworrying indication of this is the fact that the state bureaucracy is beinginflated by the recruitment of staff from the police and secret services appar-atus.52 In view of the structural conditions associated with the weakness of thecentral state, it is, however, possible to state with some confidence that areversion to a unitary state according to the Soviet model is unlikely.



The possibilities for Moscow to gain influence in the regions are limited.This can be seen, for example, in the fact that in the elections for governorswhich have been held in over 70 regions in 2000–2002, Moscow has notalways been able to secure the victory of its preferred candidates. In 2000,only seven candidates backed by the Kremlin in 44 regional elections won; in2001, there were seven victories for the Kremlin in 14 races, but in 2002, theKremlin managed 10 victories in 14 elections.53 An indication that the Kremlinis no less averse to a confrontation than the regions can also be seen in the factthat the Russian president has so far not made use of his right to dismissgovernors – a right he holds under a law, again passed in summer 2000, sim-plifying the process of dismissing governors.54 Putin has also demonstrated awillingness to make concessions by allowing a number of regional executiveheads to stand for a third term, in some cases even a fourth term. This givesthese governors and republican presidents still more time to consolidate theirpower base within their regions.55

Hence, a close review of his policies over the last two years indicates thatthis is a comprehensive blueprint for the modernisation of the Russian econ-omy and society that is primarily based on Western models, and thereforerepresents a continuation of the reforms commenced under Boris Yeltsin.56

Putin’s accumulation of power is, in the words of Moscow Carnegie AssociateLiliya Shevtsova, ‘not an end in and of itself’. Rather, Putin has demonstratedthat he is ‘prepared to employ his presidential powers for the modernisation ofRussia’.57 Putin himself stated at a meeting with the Canadian prime ministerin Moscow on 12 February 2002 that the challenge of building federalismconsists in the twofold task of giving ‘free breathing to the regions and at thesame time strengthen the unified statehood’.58

In an interview with the Financial Times published on 17 December 2001,Putin explained that initiatives such as the introduction of the presidentialrepresentatives in the seven federal districts are being introduced with thepurpose of transforming Russia into a ‘modern, stable and prosperous nationin economic, political and social terms . . . But by no means are they [thepresidential representatives] allowed to take over any powers of the regionalheads of administration who have been elected by the people’.59

Regional Policy Dilemmas: The Case of the Seven Federal Districts

The Kremlin reformers thus seem to recognise that in order to cope with themulti-faceted tasks and challenges accompanying a noticeably more globa-lised environment, Russia needs to have a strong central state with the abilityto act effectively. At the same time, it is also understood that Russia needs tohave a minimum critical mass of regional and local autonomy to accomplishthese tasks.


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There are serious obstacles on the path towards effective territorial man-agement. Putin has identified Russia’s most urgent problems and has initiatedconcrete steps in terms of economic and social modernisation. At the sametime, however, he is acting within the framework of Russian tradition byinitiating reforms from the top without actively involving civil society in theprocess. Given the scarcity of resources still faced by the central state, anystate model organised strictly from above might easily result in the applicationof authoritarian measures – which in turn would undermine existing demo-cratic institutions and thereby also threaten the very idea of federalism.

Like Yeltsin before him, Putin has to wrestle with the problem of finding abalance between providing domestic stability and meeting the challenges ofglobalisation. On taking office, Putin found that he had to rectify the short-comings of regionalism under Yeltsin by placing developments at sub-nationallevel under increased control from the centre. As before, the difficulty is howto increase state control without suppressing regional initiatives, and thereforeeconomic development.

The dilemma in regional policy is particularly evident in the case of theseven federal districts. These can be seen as part of Putin’s overall agenda, to theextent that they have been created in order to harmonise the legal environment,dismantle the various forms of interregional barriers and trade impediments,and ensure the free flow of capital and information. Accordingly, the creationof the federal districts is in line with Putin’s overall effort to ameliorate Russia’sinvestment climate and pave the way towards integration into the world economy.

At the same time, however, there have been reactions, specifically fromregional governors, criticising this new administrative structure as ultimatelycreating an obstacle to the deployment of regional initiatives and the integra-tion of Russia into the structures of the world economy. For example, NikolaiFedorov, president of the Chuvash Republic, argues that Putin would beupholding the epitome of the Soviet tradition if he inflated the bureaucraticsystem and enforced the reforms using personnel from the secret services andthe military. Others complain about the practice applied with increasingfrequency whereby individual governors are not able to contact Moscow min-istries directly without prior consultation with the presidential representative.Since in many sectors of activity – including foreign trade in particular – theregions have to work with the authorities in Moscow, the bureaucratisation ofdecision making and consultation mechanisms are seen as diminishing politicaland economic effectiveness.60 Mikhail Prusak, governor of Novgorod Oblast,believes that the introduction of the institution of the presidential representa-tives is hampering market reforms in the regions, since financial resources areincreasingly being concentrated on development projects at the level of thefederal districts, which in his view is to the disadvantage of individual regions,as they are receiving less in financial terms to conduct their reforms.61



The fundamental drawback of the concept of the federal districts is thatthis is an institution that has an administrative and control function and willnot necessary meet the criteria of market efficiency. In precisely the same wayas the governors, the president’s representatives immediately set about consol-idating their authority within their respective districts, by trying to implementtheir own economic programmes and trying to control financial flows via theircontacts with the Moscow centre, and also by working with actors from thebusiness and financial sectors. For example, Petr Latyshev, the presidentialrepresentative in the Ural Federal District, encouraged businesspeople in hisdistrict to take their concerns not to the administration of the relevant gov-ernor, but directly to him. By acting in this way, the presidential representativesimmediately came into conflict with other state authorities, naturally above allwith the governors, but also with other state structures (most notably with thefederal ministries). However, unlike the governors or republican presidents,the presidential envoys are not elected by the population. Accordingly, someanalysts feel that the office of the presidential envoys is ‘dangerous’ in that itis a new bureaucratic structure built on top of other structures. Thus, the envoyis considered to be ‘just an official nominated by the president, who is notheld accountable to the population’.62

An area not without its problems is the attitude of the presidential repre-sentatives to forms of cooperation initiated by representatives of the regions,since such initiatives have the potential to escape federal control. Frictionarose in the case of the Greater Ural and Siberian Accord interregional associ-ations. These two associations, which had also been relatively active in theYeltsin period, are particularly inclined to circumvent the presidential repre-sentatives on economic and political issues. They try to make decisions eitherindependently or in direct consultation with the federal centre.63

The weakness of the concept of the federal districts is not least a conse-quence of the fact that their areas of competence were not clearly formulatedat the outset. In a situation dominated by a lack of certainty, the presidentialrepresentatives are less concerned with effectiveness than with the problem ofhow they can extend their power bases at the expense of other institutions.The federal districts are still in the process of finding their niche in theRussian political landscape, and their identity in the global environment. Untilthis process has been completed, tension and conflict will inevitably continueto arise.64

While Putin was rather vague on the issue of the federal districts untilrecently, the idea of strengthening this institution received new momentum inthe president’s annual address to the Federal Assembly on 18 April 2002.Putin stated that the organisational process of establishing the federal districtshas been completed in that ‘the federal power has de facto been brought closerto the regions’. Putin then declared that ‘it’s time to shift some federal


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functions to the district level, moving them closer to the regions, above allmonitoring and personnel issues, specifically in the areas of financial monitor-ing and choosing candidates in the regional divisions of federal bodies’.65

Commenting on Putin’s remarks, Andrei Ryabov, an official at the MoscowCarnegie Centre, holds the view that ‘the president is inclined to graduallytransform his plenipotentiary representatives into a new institute of powerwith real authorities’.66 Putin’s intention to consider giving more power to agroup of officials whose performance has not been fully effective could beexplained by the fact that he simply has not much of an alternative. Accordingto Peter Reddaway of George Washington University, Putin has a ‘shortbench of personal loyalists’ and has failed to build an independent powerbase. Accordingly, one should not expect Putin to have too many tools avail-able to project his power in the regions.67

It is still early to tell in which direction the process is likely to move. IfPutin’s blueprint does prove to be effective, and a uniform administrativestructure and infrastructure can be brought into being within the federal dis-tricts, the possibility of an amalgamation of regions and the dissolution of theprevious regional structure over the next few years cannot be discounted. Ifthe centre continues to be weak, either the federal districts could continue tolose significance, or the regions could decide to make use of this institution,and to act on their own initiative to create economic and political structures.Even if separatist aspirations are currently suppressed, it is not impossible –according to former Yeltsin adviser Georgii Satarov for example – that in thatcase a federal district might one day be able to separate from Moscow.68

A major problem of the districts is the enormous diversity of the regionsincluded within them. Igor Leshukov, director of the St Petersburg Centre forIntegration Studies, argues with regard to the feasibility of economic planningat the level of the North-West Federal District that ‘the North-West is not aneconomic entity. The interests of the North are one thing, the interests of StPetersburg another, those of Pskov Oblast are a different issue again. Tryingto combine these interests into one means going against the logic of economicdevelopment.’69

The difficulty of developing a coherent strategy at the supraregional levelis best illustrated by the recent debate surrounding the formulation of a strategicplan for the development of the North-West Federal District. The ‘North-West’ St Petersburg Centre for Strategic Research began the process, andpresented its ‘Doctrine on the development of the North-West’ on 6 July 2001to representatives of all eleven regions of the district.70 The initiative wasunanimously rejected by all regional delegates present – some, like NovgorodGovernor Mikhail Prusak, had nothing but severe criticism for the document.71

Despite this setback, Viktor Cherkesov, who was the presidential represen-tative in the North-West Federal District until spring 2003, took up the initiative



again. Working together with the Coordinating Council of the North-WestInterregional Association, he succeeded in setting up a working commissionto draft an alternative document, including representatives from all elevenregions. At the same time, the ‘North-West’ St Petersburg Centre for StrategicResearch also continued its work on the strategy, with Cherkesov’s support.

These common efforts resulted in a 500-page ‘Strategy on the Social-Economic Development of Russia’s North-West until the Year 2015’, whichwas presented at a meeting on 4 April 2002 of all governors and the presiden-tial representative (only Novgorod Governor Mikhail Prusak and KarelianPresident Sergei Katanandov failed to attend). The reactions of the partici-pants were mixed. Cherkesov praised the document as being ‘one of Russia’sfirst attempts at strategic planning at the meta-regional level’ and SergeiVasil’ev, Federation Council representative from Leningrad Oblast, even calledit ‘the encyclopaedia of our future life’. However, most governors confessedthat they had not even managed to read the whole text. Murmansk GovernorYurii Evdokimov stated that the strategy was devoid of ‘concrete elements’and that it reminded him of a Soviet gosplan.72 And indeed, the documentgives little indication of exactly how a successful transformation of this regioninto a prosperous zone of economic stability can be achieved by the year 2015(among other things, the document envisages the district’s economy beingbased on high-tech production, and an average salary of US$500 per month ifthe strategy is implemented successfully).73

The participants were also divided on the proposed strategy for anotherreason. The document envisages a new approach to regional policy, byemphasising the need to develop the territory without its being dependent onongoing assistance from the federal centre. Viktor Cherkesov stated at themeeting that it was high time for the regions to disengage from the ‘state-paternalistic relationship of dependence and to create mechanisms allowingautonomous territorial development’.74 However, not all governors agree withthis assessment. Pskov Governor Evgenii Mikhailov declared that ‘we don’tintend to be independent of the centre. On the contrary, we plan to be evenmore dependent’.75

New Regionalisation Trends

Where is Russia’s regionalisation process headed? What kind of regional sys-tem is going to emerge? While the example of the federal districts has thrown upsome fundamental dilemmas for regional policy, the strategic discussion on thedevelopment of the North-West Federal District highlights the point that, sincePutin’s arrival, the debate on fundamental issues of regionalisation and thefederal structure in Russia has been intensive, and conducted with a new senseof vigour. Similar discussions are also taking place in other parts of Russia, with


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the debate being particularly lively in the Volga Federal District, for example.76

Whereas during Yeltsin’s time the debate was more or less reduced to the issueof whether regionalism was a ‘good or a bad thing’ for Russia, the discoursetoday is more complex. The proposals and initiatives now being advanced by arange of institutions and organisations – both state and non-state – generallyinclude innovative ideas. At least at the level of discourse, Russia is presentingitself as open, willing to experiment, and receptive to new ideas.

In contrast with the previous situation, the discourse is today no longercharacterised exclusively by thinking in traditional categories such as sov-ereignty, security, hierarchical structures, clear administrative boundaries andregional interests. This ‘hard’ form of regionalism, which became establishedduring the Yeltsin period, is increasingly being overtaken by the idea of a‘soft’ regionalism. Proposals along these lines are increasingly focused onhorizontal networks and relationships, the autonomy and diversity of differentelements within a regional system, open frontiers, flexible and ad hoc arrange-ments between the actors involved and a deregulation of the political environ-ment, replacing hierarchical structures with horizontal linkages.77

This sort of discourse is conducted mainly in academic circles, and as suchis obviously of only marginal significance in terms of practical politics. On anabstract level, however, these arguments can, in a sense, be seen as reflectinga range of changes currently taking place in the Russian regional landscape.Three developments in particular – pluralisation of the regional political land-scape, the strengthening of local self-government, and the penetration of largebusiness and finance enterprises into the regions – could be of greater signifi-cance than Putin’s federal reform package of 2000 in leading to changes in theregional system in Russia.

Pluralisation of the Regional Political Landscape

While Putin’s initiatives – for example, the measures against the institution offree media – may give rise to fears of a setback for democracy, there havebeen some developments within the regions moving in the direction of a land-scape with an increasing pluralisation of actors, thereby eventually alsoincreasing the prospects of democratisation. Even though in many regionspower is still largely controlled by governors, and the quasi-authoritarian styleof rule characteristic of the time under Yeltsin still prevails to some extent, aturnaround can be observed in this area, with the potential for more majorchanges in the future.

In spite of the low level of administrative efficiency of the federal districtsand the limited respect in which they are held,78 it appears that the presidentialrepresentatives and the various federal institutions in the regions now have ahigher profile than before. Whereas presidential representatives in the regionscarried little political weight under Yeltsin, often actually being directly



dependent on the regional authorities,79 they are now much more visible, andabove all more independent as actors in the regional political landscape. Eventhough the new institution has not yet been successful in areas such as thecreation of a common infrastructure, the changes which have occurred aresignificant insofar as presidential representatives are now prepared to criticisegovernors and challenge their authority directly and in public (in the media,for example). Given the limited resources available to this institution and acontinuing lack of clarity regarding the presidential representatives’ areas ofcompetence, their place, status and role in regional political life is defined notso much by formally established institutional rights and competencies as bytheir personal qualities and the informal networks these officials have man-aged to establish with other key political figures in the regions.

Accordingly, the profiles of the presidential envoys differ considerablythroughout the seven districts. Two separate surveys of experts and membersof the elite of St Petersburg on the degree of influence of various personalitiesin St Petersburg suggest that while Cherkesov’s political influence in the citywas significant (both surveys place him second only to Governor Yakovlev),he carried little or no weight in terms of his ability to have an impact onregional economic development (in the results of one survey he comes ninth,the other survey places him 15th).80

According to a ‘success rating’ of all presidential representatives, whoseresults were published in the journal Kommersant” vlast’, Cherkesov wasplaced exactly in the middle of the range, in fourth place. The assessmentswere based on three criteria of achievement: first, success in promoting theircandidates in gubernatorial elections, second, quantity of regional law broughtinto line with federal law, and third, the number of references to the presiden-tial representative in the regional and national media. According to thesecriteria, Sergei Kirienko, the presidential envoy in the Volga Federal District,clearly leads the list, followed by Viktor Kazantsev (Southern FederalDistrict) and Petr Latyshev (Ural Federal District). The other three representa-tives, Leonid Drachevskii (Siberian Federal District), Georgii Poltavchenko(Central Federal District) and Konstantin Pulikovskii (Far Eastern FederalDistrict) are all much further down in the ranking.81

The Putin reforms have also increased the importance of the regionalparliaments. The new federal legislation grants the regional legislative bodyrights and competencies giving it greater latitude vis-à-vis the executive.Thus, the regional legislative authority may block the appointment of thecandidate for the Federation Council nominated by the executive with atwo-thirds majority, and has a similar veto to block a decision to dismiss therepresentative.

The constellation of political actors in the regions could also be affected bynew legislation on the election system in the regions. Among other provisions,


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the law sees elections for the regional parliaments based – in the same way asin the State Duma – on half the members being elected by proportional repre-sentation on the basis of party lists and the other by the direct, or ‘first pastthe post’ election of candidates in electorates, with one seat each.82 To date,political parties have played only a minor role in the regional political land-scape – only around 20 per cent of MPs are currently members of a party. Ifthe law is implemented, this could give momentum for the formation of aparty-based political arena in the regions, and this would probably alsostrengthen the legislative in relation to the executive.83 This could promotepolitical pluralism in the regions and at the same time fit in with the efforts ofthe Kremlin to restrict the power of the governors.84

Certain federal government decisions have also contributed towards bettercompliance with the principles of the free market and political transparency.An impressive example can be seen in the federal regulation taking decisionson the allocation of fish product export quotas out of the hands of the gov-ernors, and organising the allocation process by public auction, which in theview of Russian Economic Development and Trade Minister German Gref isthe clearest and most transparent mechanism for quota allocation.85 Mostregional governments in the Russian Far East have endeavoured (withoutsuccess) to oppose this decision, since they were well aware that this woulddamage the paternalistic networks on which their authority largely depends.86

There are two other, eventually more powerful trends, which could lead toa change in the regional power configuration (and eventually also lead tomore political pluralisation): the strengthening of the institution of local-selfgovernment and the growing role of national business structure in the regions.

Strengthening of Local Self-Government

The institution of local self-government could also free itself to some extentfrom the tight grasp of the regional authorities. Even though, under the consti-tution, local self-government authorities are explicitly not subordinate to theregional authorities, the regional structures have always been at pains toensure that local self-government is implemented as they see fit. This stillapplies today, to the extent that in many regions the heads of local governmentdepartments are appointed by the regional authorities, and entirely dependenton the regional budget for funding.87 According to Deputy Minister forEconomic Development and Trade Vitalii Shipov, of the 11,500 municipalitiesin Russia, more than half still do not have their own budget.88

During the first year of his term of office, Putin took a cautious line on theissue of local self-government, but recently, on several occasions, he hascome out in favour of strengthening local self-government, and he has nowmade it quite clear that he will be focusing on this issue in future.89 He high-lighted this intention in mid-2001 with the appointment of a commission



headed by Dmitrii Kozak, the deputy head of the presidential administration.The commission has been tasked to work out a report on the demarcation ofpowers between the federal, regional and municipal levels of government.90

Kozak’s report, which he delivered in summer 2002, served as a the basis fortwo new draft bills, both passed by the Duma in June 2003, one on amendingthe existing legislation ‘On the general principles of legislative (representa-tive) and executive state organs in the subjects of the Russian Federation’ andthe law ‘On the general principles of the organisation of local self-governmentin the Russian Federation’.91

Putin gave considerable prominence to the issue of local self-governmentin his address to the Federal Assembly of 18 April 2002, indicating that the mostpressing problem was broadening the financial base of this institution. Putinunderlined that ‘without properly functioning local self-government, thebuilding of effective state structures is virtually impossible. And besides, it isspecifically here, at the local level, that there is enormous potential for achievingcivil control over the state. It is therefore at this level that we must put ourhouse in order’.92

The situation of local self-government became the subject of intensive debateat the time of Putin’s monthly meeting with the seven presidential representatives,where Putin urged them to start campaigns in their districts to strengthen thisinstitution.93 According to Sergei Kirienko, the presidential representative inthe Volga Federal District, this instruction included the formulation andimplementation of clear legal principles setting out the rights and competenciesof local self-government vis-à-vis other state government levels, the developmentof legal principles with a view to promoting the independence of local self-government from regional authorities, and ultimately the increased involve-ment of these institutions in regional strategic planning within the regionaldistricts. Kirienko himself sees the strengthening of local self-government asan important instrument for the continuing democratisation of Russia.94

How far it will be possible to implement these plans remains to be seen.The most difficult problem, i.e. how local governments can adequately fundtheir activities, is still far from resolved. Chapter 52 of the new draft law simplystates that ‘every municipal formation has its own budget (local budget)’. Thiswill hence be possible only if local governments are given a greater share ofregional income taxes. This, however, touches upon serious economic inter-ests of all regions and will be difficult to achieve in practice. Local officialscomplain that the situation has even become worse with the reform of the taxsystem, because, as argued by Perm Mayor Arkadii Kamenev, the federalgovernment is now taking more from the regions, which, in turn, extractgreater resources from local governments.95

However, there are at least two indications to suggest that the situation oflocal self-government has already improved over the previous position. First,


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from the beginning of his term of office, Putin has clearly identified himself asa defender of the interests of Russia’s politically and economically importantcities.96 This is a point of considerable importance, in that many large citiesand their mayors have long been struggling against having their decisionsmade for them by the political leadership of the regional centres. Putin’sposition on this issue could lead to these conflicts being resolved in favour ofthe cities and an extension of their autonomy. A project fully in line withPutin’s policy of strengthening cities is the initiative by Georgii Poltavchenko,presidential representative in the Central Federal District, to create a newassociation of all oblast urban centres in his district. All the mayors, with theexception of those of the cities of Moscow and Tver, agreed on the formationof this new association at the meeting held on 15 February 2002 in Kursk.This form of direct collaboration between a presidential representative andcity authorities is a new phenomenon in the history of the relations betweenthe federal centre and local entities, and is unlikely to be welcomed by thegovernors, fearing a further erosion of their power base in their territories.97

Second, the institution of local self-government has also benefited fromthe trend towards harmonisation of the legal environment and a strongeremphasis on constitutional and federal law. In this context, a court decisioncould become a national landmark judgment. This is the ruling of the RussianSupreme Court of 30 March 2001, stating that the 125 local chairpersons ofthe districts of Moscow City must in future be elected, rather than beingappointed directly by the Mayor of the city, Yurii Luzhkov.98 (Luzhkov, how-ever, has now succeeded in ensuring that the elections will not be held untilDecember 2003.99) In the meantime, the federal centre has also ruled that allof Russia’s 21 ethnic republics, where the situation of local self-government isespecially severe, must hold local elections in the near future.100

Departing from an understanding that the strengthening of local self-government is in line with the current ‘glocalisation’ trend, i.e. a world whichis increasingly interlinked in economic, political and cultural terms, with asimultaneous decentralisation and shift of power towards local structures, theauthors of the report of the Nizhnii Novgorod Centre for Strategic Studies,already referred to above, believe it is probable that the process of regionalisa-tion in Russia in future will be based on the expansion of urban autonomousstructures and the development of cooperation arrangements between cities.The authors believe that the future lies with the cities, as the natural centresfor technological innovation, services and intellectual activities on the basis ofa high concentration of human resources and a quality infrastructure. In theirview, cities, being smaller and therefore more flexible than regions, are able toprovide the economic potential required in the current environment of competi-tion for global markets and information technologies.101 A recent concreteexample is the Club of Six, the merger of the six most populous cities of the



Volga Federal District, created in spring 2001. Entirely in accordance with the‘glocalisation process’, the founding document of the ‘club’ notes that largecities will be the technology, business and sociocultural centres of the future.102

Penetration of Russian Big Business into the Regions

Even if the ‘oligarchs’ have largely disappeared from the political limelightsince Putin took office, they continue to exert a major influence on Russianpolitics and the economy. In fact, the large business and financial enterprisesheaded by these business magnates now control a larger share of the Russianeconomy than they did under Yeltsin. In 1997, Russia’s top ten companiesaccounted for 57 per cent of the country’s total net profits. In 2000, their sharereached 61 per cent.103

In contrast with the situation during Yeltsin’s rule, these national andtransnational corporations are also becoming more involved in the Russianregions. They now play an unmistakeable role in the organisation of politicalforces in many regions, and have even become an important element in theformation of centre–periphery relationships. To a much greater extent thanPutin’s institutional reforms could ever have achieved, the engagement ofRussian business and finance groups effectively reined in the excessivepowers of governors and republic governors.104

The decision by prominent enterprises, such as LUKoil, Gazprom, RussianAluminium, Severstal, or the Alfa Group, to move their activities increasinglyto the periphery was based first on the fact that, on taking up office, Putinindicated he would be taking action against the oligarchs (including suchprominent figures as Vladimir Gusinskii and Boris Berezovskii), and theywould be forced out of national politics. With those of the oligarchs who didnot openly oppose the president, Putin formed a de facto alliance, whereby thebusiness and financial groups undertook to stay out of national politics, and inreturn they could rely on political stability and protection from the Kremlin tocontinue their business activities. As a way of avoiding possible future con-flicts with the Kremlin, however, many oligarchs decided to shift their powerbase into the regions, far removed from Moscow’s sphere of influence.105

Expansion into the regions also became an attractive prospect for the largecorporations in economic terms following the crisis in August 1998 and thedrop of 75 per cent in the value of the Russian rouble. As well as makingRussian goods more competitive on the domestic market, the devaluation ofthe rouble increased competitive opportunities on the world market. One ofthe reasons for the upturn in the Russian economy at the end of the 1990s –and not the least important – was precisely the fact that now, rather thaninvesting their profits (mainly from exports) solely in foreign countries, theoligarchs started to invest within Russia as well, so much so that in manyregions national economic actors started systematically buying up the shares


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of regional companies. One of the best examples can be seen in the takeoverof the GAZ automotive factory in Nizhnii Novgorod by the Russian Alumin-ium group, headed by industrial magnate Oleg Deripaska. As well as control-ling the capital of the businesses they take over, these new economic actorsalso often immediately replace the managers with younger, highly qualifiedspecialists who are used to operating in a market economy environment.

This trend is having a number of consequences for politics in the regions.The alliances formed between political and business players seen in manydistricts after 1991 were in many cases based on personal contact networksfrom the late Soviet era, when commercial structures were establishedbetween the directors of large enterprises and the local party authorities. Inthe context of a centrally planned economy, the enterprises were not onlysubordinate to the state ministries in Moscow, but also controlled by partyofficials in the regions. However, the erosion of central power underGorbachev, and the process he initiated whereby the party was to disengagefrom economic activities and its role would be taken by the state institutions,had the effect of boosting the importance of regional enterprise directors, whonow, with the removal of party control and the restructuring of the ministriesresponsible for the economy in Moscow, became de facto owners of the com-panies in question. And indeed, following the collapse of the USSR, thesedirectors often acquired large stakes in the share capital, thereby actuallybecoming the legal owner.106

The post-1991 environment in the Russian regions saw the emergence ofmany different forms of power relationships. For some regions, particularlyethnic republics (Tatarstan, Bashkortostan) and regions with high-profile leaders(Moscow City, Kemerovo Oblast), the Yeltsin period was typically character-ised by a form of patronage of business by political authorities. In theseregions, governors and republic presidents often held large stakes in the sharecapital of local enterprises. In other regions, a largely equal, partnership-stylerelationship formed between political and business spheres. This model wastypical in regions where the elite conducted reforms to create a market econ-omy and displayed a liberal style of political leadership (Novgorod, Samara).In poorer regions in particular, largely dependent on financial allocations fromthe centre, there were frequent confrontations between politicians and thebusiness sector. Because of the lack of financial resources, the political elitewas too weak to exert any influence on the economic actors in their territorialareas. Instead of developing joint strategies to overcome the crisis, in theseregions political and economic actors fought for control of the scarce resources(Kirov Oblast). In some cases, it even happened that groups of businessmenactually effectively took over political power. Particularly in regions with amonoindustrial base, the managers of industrial enterprises sometimes exertedvery considerable influence. As well as having a crucial role in political



decision making, in some cases they also nominated candidates for top execu-tive positions (Khakassia Republic, Tyumen Oblast).107

In regions where a cooperative relationship was formed between localbusiness structures and political power, alliances of mutual benefit wereformed. The business sector financed election campaigns, granted loans forthe local budget, or funded specific social programmes. In return, the politicalelites looked after the interests of the business sector by giving preferentialtreatment to certain enterprises, issuing concessions or licences, or activelylobbying the centre on behalf of regional business interests. Political and busi-ness circles were fundamentally dependent on one another, and accordingly,any conflict between them had very serious effects, with negative impacts onthe economy of the entire region.

The new phenomenon since Putin’s arrival is not the diversity of forms ofrelationships between business interests and political structures in the regions,but rather the fact that large national corporations are now competing withlocal businesses and have in some cases already superseded them. The differ-ence is that they generally have far more influence and resources than localbusinesses structures, to enable them to form the kind of alliances they wantwith political authorities.

Just as during the Yeltsin period, the relationships between business andpolitical structures can be categorised into a number of different types.108

Under Putin, an ever-increasing number of regions fall into the category of‘corporate regions’, i.e. regions where one corporation exerts a dominantinfluence on developments in the entire region. This model can be observed inthe remote, but resource-rich Autonomous Okrug of Chukotka, which is prac-tically dominated by a single corporation, Roman Abramovich’s Sibneft, andin the city of Moscow, where the situation is largely controlled by Luzhkov’scorporation Sistema. Some 20 further regions can be classified under thiscategory, including a noticeably high number of resource territories in the farnorth and the northern parts of Siberia (for example, seven out of ten auto-nomous okrugs, the Sakha (Yakutia) and Komi republics, and the Omsk andTomsk oblasts, fall into this category).

In some regions, the situation is still controlled by the state, i.e. regionalpolitical authorities. This is especially the case in regions where the entireeconomy is dominated by one specific sector, the defence sector, for example.This kind of situation can currently be observed, for example, in the UdmurtiaRepublic and Khabarovsk Krai. State dominance is also still the norm for anumber of ethnic republics with strongly defined authoritarian power struc-tures. Thus, in Tatarstan and Bashkortostan, the president, his family or otherindividuals closely linked to the president directly control large sections of thebusiness sector. In contrast to the situation during the Yeltsin period, however,the number of such cases in the regional landscape is now steadily declining.


28 GEOPOLITICS

The next large category comprises some 25–30 regions where severallarge national corporations have become involved simultaneously, and wherea situation of competition between these businesses and/or between themand the political structures now prevails. A typical example is NizhniiNovgorod Oblast, where a considerable number of prominent oligarchs havebecome involved. The same sort of ‘pluralistic’ picture can also be seenin other largely developed regions, such as Perm, Sverdlovsk or Rostov.Pluralisation can have a positive impact on the political climate by balancingout political forces; in other cases, one corporation can act in concert withpolitical structures to dictate developments in its favour (as has happened inKransoyarsk Krai, for example). Thus, the situation in these districts is stillgenerally ‘in flux’.

There are also a number of regions where foreign companies play a majorrole. This is especially evident in Sakhalin Oblast in the Russian Far East,where many foreign energy giants are involved. A major presence of foreignbusinesses can also be seen in the Novgorod, Leningrad, Samara, andMoscow oblasts. Lastly, a final category comprises those regions which haveso far been neglected by Russia’s big business. This class represents approxi-mately one-third of all regions. Most of these are poorer areas, where inves-tors see no prospect of a profitable return. They include most of the regions onRussia’s southern border, particularly the ethnic republics of the northernCaucasus and a number of territories in the south and south-east along the bor-der with Kazakhstan, Mongolia and China. Not the least of the consequencesof the involvement of big business, as highlighted by this classification intocategories, is the further widening of the gap between rich and poor regions inRussia.

The penetration of big business into the regions can impact in manydifferent ways on political processes within the respective regions. Whereseveral corporations engage in the same district, as is often the case, this canresult in competition and hence a level of pluralisation in the landscape ofactors involved. However, there are also repeated instances, precisely inthese ‘pluralistic’ regions, where business operators newly involved in thearea do their utmost to stay out of the political arena, preferring a properlyregulated, institutionalised relationship with political authorities to any kindof informal arrangement. The companies undertake to pay their taxes andsettle any debts to the state, and are thus able to remain neutral towardspolitical power structures. This also reduces the ability of governors to exerttheir influence.

The situation can be quite different in the ‘corporate regions’, i.e. thoseregions where business magnates exert direct control on political structures, asseen more and more frequently over the last two years. Indeed, Russianmagnates have now been elected to governors’ positions in eight Russian



regions.109 A striking feature here is that in many of these ‘corporate regions’,a new generation of politicians is now starting to gain a footing, who, as wellas bringing an entrepreneurial attitude and management experience to theirnew role, are also committed to a regional economy operating on marketprinciples. Some of this new elite are also well aware that international (West-ern) investors are more likely to be willing to put money into the region iflocal political processes already display some level of political transparencyand if democratic norms and rules are observed. The oligarch’s interests couldtherefore help to integrate Russia and its regions into the world economy.110

Nonetheless, the election of business operators to executive office involvesthe risk that political and economy power may coalesce into a single indivisibleentity, since financial wealth and political status give such individuals almostunlimited resources to extend their power base within the region at will.111

A stronger regional presence of large national and transnational corpor-ations will obviously also impact on the interaction between the centre and theregions. The involvement of big business has given regional politicians achannel for having their interests represented at national level. A central rolein this process is also played by the Federal Council, where many of the sena-tors are Moscow officials and businesspeople. They represent not only theinterests of a particular region, but also those of the businesses operating inthat region. Virtually all major Russian business and financial groups have‘their’ senator in the Federal Council. Corporations such as Mezhprombank,Transaero, Russian Aluminium, Interros, Unified Energy System, Gazprom,Sibneft, Transneft and Slavneft are all represented, for example.

Outlook and Conclusion

Russia’s regional system is on the move. Apart from the developments out-lined in the previous sections, there are currently a number of other trendswhich could lead to changes in Russia’s regional structure. For example, it islikely that we will see a number of mergers between two or more federalentities in the near future. A new federal law now makes it possible for federalentities to amalgamate on the initiative of the regions involved. This integra-tion process has in fact already begun in a number of regions. For example,the Komi-Permyak Autonomous Okrug is endeavouring to conclude an agree-ment with its richer neighbour to the south, Perm Oblast. It is also likely thatthe Ust-Orda Buryat Autonomous Okrug will amalgamate with Irkutsk Oblast,which completely surrounds it. There are ongoing discussions on regional amal-gamation initiatives, such as Pskov Oblast merging with Novgorod Oblast,Yaroslavl Oblast with Kostroma Oblast, Krasnoyarsk Krai with the Taimyrand Evenk autonomous okrugs, Moscow City with Moscow Oblast, or StPetersburg with Leningrad Oblast.


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Owing to a complicated nature of the process for forming new ‘subjectsof the Russian Federation’, and also the likelihood of political resistancefrom the political elite of the mostly poorer regions which would faceabsorption by their mostly richer neighbour, it is unlikely that we will seesuch mergers being implemented in the near future.112 It is, however, import-ant to see that, once again, the driving logic behind the merger idea is not apolitical, but mainly an economic one. Many of Russia’s 89 regions are sim-ply unable to function as economic units on their own. They cannot covertheir budget costs from local revenues. If these regions had not receivedfinancing from the federal centre, social tensions would have boiled overwithin their borders long ago. Therefore, there has been little debate amongRussian politicians about whether the regions should enlarge, but when thisshould take place.113

Overall, the developments as described in this study, such as the harmon-isation of Russia’s legal space, the creation of the seven federal districts, thestrengthening of local self-government or the penetration of national businessin the region could be interpreted as being generally in line with Russia’sstrive for modernisation; they also seem to fit into the general ‘glocalisation’trend. However, Russia’s successful participation in global economic andsocial processes is also dependent on reinforcement of its democratic institu-tions and increased transparency in political processes. Increased integrationof Russia into global structures and relationships might further democratisa-tion trends in Russia; but the continuation of the democratisation process canultimately be guaranteed only if it is actively supported by Russia’s politicalleaders.

It is thus essential that the prevailing view within the Russian leadershipshould be that the way to prevent corruption, abuse of office and monopoli-sation of power in the regions is not still more new laws, regulations andbureaucracy, but a precisely-targeted consolidation of the existing demo-cratic institutions. So far, the Kremlin has placed the focus on centralisationand the strengthening of state control. If Russia’s modernisation project is tosucceed in the long run, it is imperative that civil society should becomeinvolved in the process of reforms on a much broader scale. Otherwise, thecurrent reforms will work in favour of the bureaucracy and tycoons, andpreserve stagnation and a corrupt political system. Strengthening theregional parliaments, creating a judicial system that is not dependent onpolitical considerations, providing funding support for the structures of localself-government, promoting the development of small and medium-sizedbusiness, activating the presence of political parties, or ensuring the freedomof the media are techniques which should also be used to restrict the powerof the regional executive and combat the associated negative effects ofregionalism.



NOTES

1. For an overview on the discipline of ‘political regionology’ and the state of research, seeV. Gel’man, Politics Beyond the Ring Road: Rethinking Post-Soviet Experience, Studies inPublic Policy 367 (Glasgow: University of Strathclyde, Centre for the Study of PublicPolicy 2002).

2. N. Petrov, Broken Pendulum: Recentralization under Putin, PONARS Policy Memo 159(Centre for Political–Geographic Research [Moscow] and Macalester College, November2000), available at <http://www.csis.org/ruseura/ponars>.

3. The Jamestown Monitor 6/150 (2000), available at <http://russia.jamestown.org>. 4. According to Vladimir Putin, 80 per cent of the laws and constitutions of federal entities

have been brought into line with federal legislation and the Russian constitution since theintroduction of the seven presidential representatives (see Kommersant Daily, 14 May2001). However, the harmonisation of law texts has encountered difficulties in those regionswhere political leaders have emphasised their ‘sovereignty’ particularly strongly and haveadopted a legal stance at odds with federal norms (particularly prominent in this regard arerepublics such as Tatarstan, Tuva, Sakha [Yakutia] or Bashkortostan).

5. R. Orttung, Putin’s Main Accomplishment is Centralization, Russian Regional Report 6/45(2001), available at <http://www.isn.ethz.ch/researchpub/publihouse/rrr/>; V. Gel’man, TheRise and Fall of Federal Reform in Russia, PONARS Policy Memo 238 (prepared for thePONARS Policy Conference, Washington, DC, 25 January 2002), available at <http://www.csis.org/ruseura/ponars>.

6. See, for example, O. Lucherhadt, ‘Starker Staat’ Russland: Putins ehrgeiziges Programm’,Internationale Politik 55/5 (2000) p.7.

7. J. Grävingholt, ‘Warum Russlands Föderalismus nicht tot ist: Ein Plädoyer gegen dieUnterschätzung von Institutionen’, in Gewinner und Verlierer post-sozialistischer Trans-formationsprozesse: Beiträge für die 10. Brühler Tagung junger Osteuropa-Experten,Arbeitspapiere und Materialien 36 (Bremen: Forschungsstelle Osteuropa 2002) pp.97–100.

8. This line of argumentation follows K. Segbers, ‘Introduction’, in S. Segbers (ed.), Explain-ing Post-Soviet Patchworks, Vol. 1 (Aldershot, Hants, England; Burlington, VT: Ashgate2001) p.6.

9. Quoted from ‘Osnovnye polozheniya regional’noi politiki v Rossiiskoi Federatsii’,Rossiiskaya gazeta, 11 June 1996.

10. On the concept of ‘region’, see, for example, H.H. Blotevogel, ‘Auf dem Weg zu einerTheorie der Regionalität: Die Region als Forschungsobjekt der Geographie,’ in G. Brunn(ed.), Region und Regionsbildung in Europa: Konzeptionen der Forschung und empirischeBefunde: wissenschaftliche Konferenz, Siegen, 10.-11. Oktober 1995 (Baden-Baden: Nomos1996) pp.44–68.

11. The Russian constitution of 12 December 1993 divides the 89 ‘subjects of the RussianFederation’ into the following categories: 21 republics, six krais, 41 oblasts, two federaltowns (Moscow and St Petersburg), ten autonomous okrugs and one autonomous oblast.

12. A useful definition of regionalism is provided by: C. Goehrke, ‘Zum Problem des Regional-ismus in der russischen Geschichte: Vorüberlegungen für eine künftige Untersuchung’, For-schungen zur Osteuropäischen Geschichte 25 (1978) pp.75–107, especially pp.77–82.

13. On this, see P. Rutland, ‘The Politics of Economic Stagnation in the Soviet Union: The Roleof Local Party Organs in Economic Management’ (New York: Cambridge University Press1993).

14. N. Lapina, ‘Die Formierung der neuen russländischen Elite: Probleme der Übergangsperi-ode’, Berichte des Bundesinstituts für ostwissenschaftliche und internationale Studien 7(Cologne: Bundesinstitut für ostwissenschaftliche und internationale Studien 1997) pp.6–9.

15. The theory of the ‘administrative market’ is based mainly on the works of Simon Kordonskiiund Vitalij Naishul’: S. Kordonskii, ‘The Structure of Economic Space in Post-Perestroika-Society and the Transformation of the Administrative Market’, in K. Segbers and S.DeSpiegeleire (eds), Post-Soviet Puzzles: Mapping the Political Economy of the Former SovietUnion, Vol. 1 (Baden-Baden: Nomos 1995) pp.5–47; V. Naishul’, The Supreme and Last Stageof Socialism: An Essay (London: Centre for Research into Communist Economies 1991).


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16. A number of previous studies have characterised the Soviet system as a gigantic bureau-cratic machine, in which all spheres of administrative areas and departments competed,traded and negotiated with one another. On this, see W. Taubmann, Governing Soviet Cities:Bureaucratic Politics and Urban Development in the USSR (London and New York:Praeger 1973), especially pp.18–19.

17. D. Müller, Regionalisierung des post-sowjetischen Raumes, Arbeitspapiere des Osteuropa-Instituts der Freien Universität Berlin 6 (Berlin: Osteuropa-Institut der Freien UniversitätBerlin 1997) pp.10–12.

18. As emphasised by Sergei Medvedev, for example, on the one hand the administrative mar-ket operated almost exclusively on the regional level, and on the other, major sectors of theSoviet economy (the fuel and raw materials complex, the miltary-industrial complex, andagroindustrial complex), as well as the economic activities of the army, the KGB and theMinistry of Internal Affairs, was organised along regional lines: see S. Medvedev, ‘Post-Soviet Developments: A Regional Interpretation’, in K. Segbers and S. DeSpiegeleire (eds),Post-Soviet Puzzles: Mapping the Political Economy of the Former Soviet Union, Vol. II(Baden-Baden: Nomos 1995) pp.10f.

19. See D. Bahry, Outside Moscow: Power, Politics, and Budgetary Policy in the Soviet Repub-lics (New York: Columbia University Press 1987).

20. On Soviet regional politics, see J.R. Schiffer, Soviet Regional Economic Policy: The East-West Debate Over Pacific Siberian Development (London: Macmillan 1989).

21. On the evolution of the Soviet elite in general, see W.A. Clark, Soviet Regional Elite Mobil-ity After Khrushchev (New York: Praeger 1989); K.C. Farmer, The Soviet AdministrativeElite (New York: Praeger 1992); T.H. Rigby, Political Elites in the USSR: Central Leadersand Local Cadres from Lenin to Gorbachev (Aldershot: Elgar 1990).

22. Lapina, ‘Die Formierung der neuen russländischen Elite’ (note 14) pp.6–9. For furtherreading on the evolution and social background of Russia’s regional elites, see V.P. Mochov,Evolutsiya regional’noi politicheskoi elity Rossii, 1950–1990gg. (Perm: Permskiigosudarstvennyi tekhnicheskii universitet 1998).

23. On the role of managers in regional politics, see K. Stoner-Weiss, Local Heroes: The PoliticalEconomy of Russian Regional Governance (Princeton, NJ: Princeton University Press1997), particularly pp.37–40.

24. P. Kirkow, Russia’s Provinces: Authoritarian Transforamtion versus Local Autonomy?(New York: St Martin’s Press 1998) p.40.

25. See A.J. Motyl, ‘Nach der Sintflut: Totalitarismus und Nationalismus im ehemaligenSowjetreich’, Österreichische Osthefte 2 (1993) p.230.

26. N. Lapina, Regional’nye elity Rossii (Moscow: INION RAN, Tsentr nauchno-informatsion-nykh issledovanii global’nykh i regional’nykh problem 1997) p.8; M. Makfol and N. Petrov(eds), Politicheskii Al’manakh Rossii 1997, Vol. 1 (Moscow: Moscow Carnegie Centre1998) p.15.

27. See, for example, the World Bank report Entering the 21st Century: World DevelopmentReport, 1999/2000 (New York: Oxford University Press 2000). This World Bank reportcalls these two forces globalisation and localisation. Localisation is understood to mean theincreasing concentration of economic and political power of cities, regions and other admin-istrative units within the national states.

28. J. Stiglitz quoted from World Bank News Release No.2000/032/S, available at <http://www.worldbank.org/html/extdr/extme/032.htm>.

29. T. Straubhaar, ‘Wird der Nationalstaat im 21. Jahrhundert überflüssig? “Glokalisierung” alsResultat von Globalisierung und lokaler Standortattraktivität’, Neue Zürcher Zeitung, 31December 1999, p.79.

30. See, on this, for example, K. Ohmae, The End of the Nation State: The Rise of RegionalEconomies (London: Harper Collins Publishers 1995) pp.79–100.

31. See R. Rosecrance, The Rise of the Virtual State: Wealth and Power in the Coming Century(New York: Basic Books 1999).

32. J. Perovic, Die Regionen Russlands als politische Kraft: Chancen und Gefahren des Region-alismus für Russland (Bern: Peter Lang Verlag 2001), particularly pp.117–23, 207–65.

33. Makfol and Petrov (note 26) pp.13–14.



34. This is clearly illustrated by the fact that in 1998 the ten leading exporting regions accountedfor over 60 per cent of total Russian exports, with Moscow City and Tyumen Oblast alonerepresenting 40 per cent of that figure. The regional imbalance is less pronounced in the caseof imports. In 1998, the ten leading importer regions represented around 40 per cent of allRussian imports. Figures calculated from Goskomstat Rossii (ed.), Regiony Rossii. Statis-ticheskii sbornik 1998, Vol. 2 (Moscow 1998) pp.782–3.

35. National News Service, 13 May 2002, available at <http://www.nns.ru/archive/region/2002/05/13.html>.

36. A comprehensive approach towards a typologisation of regional political regimes in Russiais offered in: V. Gel’man, S. Ryzhenkov, and M. Bri (eds), Rossiia regionov: transfor-matsiia politicheskikh rezhimov (Moscow: ‘Ves’ Mir’ 2000).

37. Tsentr Strategicheskikh Issledovanii Privolzhskogo federal’nogo okruga (ed.), Naporoge novoi regionalizatsii Rossii (Nizhnii Novgorod 2001), available at <http://www.okrug.metod.ru>.

38. M. Afanas’ev, ‘Chto stoit za initsiativami po ukrepleniyu ‘vlastnoi vertikali’’, Rossiiskiiregional’nyi byulleten’ 1/4 (1999) (Internet edition).

39. V. Klimanov, ‘Mezhregional’noe sotrudnichestvo’, in N. Petrov (ed.), Regiony Rossii v1998 g.: Ezhegodnoe prilozhenie k ‘Politicheskomu al’manakhu Rossii’ (Moscow: MoscowCarnegie Centre 1999) pp.87–93.

40. A. Heinemann-Grüder, ‘Putins Reform der föderalen Strukturen: Vom Nachtwächterstaatzum Etatismus’, Osteuropa 11/11 (2000) p.987.

41. A. Heinemann-Grüder, Der heterogene Staat: Föderalismus und nationale Vielfalt inRussland (Berlin: Berlin Verlag Arno Spitz GmbH 2000), particularly pp.345–58.

42. A.S. Makarychev (ed.), Rossiiskie regiony kak mezhdunarodnye aktery: Analiticheskiidoklad (Nizhnii Novgorod: Nizhegorodskii gosudarstvennyi lingvisticheskii universitetimeni N.A. Dobrolyubova 2000) pp.29–31.

43. N. Shklyar, ‘Russian Regions in Subregional Cooperation’, in R. Dwan and O. Pavliuk(eds), Building Security in the New States of Eurasia: Subregional Cooperation in theFormer Soviet Space (New York: EastWest Institute 2000) pp.87–118.

44. Putin’s annual address of 8 July 2000: ‘Vystuplenie pri predstavlenii ezhegodnogoPoslaniya Prezidenta Rossiiskoi Federatsii Federal’nomu Sobraniyu Rossiiskoi Federatsii’,Moscow, 8 July 2000, available at <http://www.president.kremlin.ru/events/42.html>.

45. The specific content of reform legislation is not discussed in this article. The measuresimplemented by Putin have already been discussed in detail in: M. Busygina, ‘Neue Struk-turen des Föderalismus in Russland: Zu den administrativen Reformen von Präsident Putin’,Osteuropa 12/10 (2001) p.1131.

46. According to First Deputy Minister of Finance Aleksei Ulyukaev, the new regulations allowthe centre to control 59 per cent of the tax revenue pie (prior to the reforms, the regionscontrolled 48 per cent, and the Federation 52 per cent of tax revenue). Interview withAleksei Ulyukaev: ‘Ne nado lishnii raz menyat’ printsip tsentralizatsii’, Zhurnal RusskiiFokus, 4 April 2002.

47. The text of the legislation ‘On the general principles of legislative (representative) andexecutive state organs in the subjects of the Russian Federation’ and the law ‘On the generalprinciples of the organisation of local-self government in the Russian Federation’ can befound at the State Duma’s Internet site at <http://www.akdi.ru>.

48. Heinemann-Grüder, ‘Putins Reform der föderalen Strukturen’ (note 40) p.989. 49. Again, see the president’s annual address of 8 July 2000 (note 44). 50. On the media situation, see ‘Russlands Medienmacht ballt sich in staatlicher Hand: Presse-

freiheit unter Druck – aber keine völlige Gleichschaltung’, Neue Zürcher Zeitung, 16–17February 2002.

51. Grigorii Yavlinskii, ‘Liberalizm dlya vsekh’, Obshchaya gazeta, 28 June 2001. 52. Nikolai Petrov, Policization versus Democratization: 20 Months of Putin’s “Federal”

Reform, PONARS Policy Memo Series 241 (prepared for the PONARS Policy Conference,Washington, DC, 25 January 2002), available at <http://www.csis.org/ruseura/ponars>.

53. J.A. Corwin, ‘Putin to Governors: Take As Many Terms As You Can Swallow’, RFE/RLRussian Political Weekly 3/1 (2003), available at <http://www.rferl.org/rpw>; R. Turovskii,


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‘Sil’nyi tsentr – silnye regiony? Itogi i uroki gubernatorskikh vyborov’, NG Stsenarii,14 March 2001.

54. The law has been published in: Rossiiskaya gazeta, 1 August 2000. 55. V. Gel’man, ‘De-demokratizatsiya regional’nykh vyborov: Ot Moskvy do Yakutii’,

Rossiiskii regional’nyi byulleten’ 4/2 (2002) (Internet edition); Corwin, ‘Putin to Governors’(note 53).

56. R. Götz, Präsident Wladimir Putins Wirtschafts- und Gesellschaftsmodell: Konzeption,Einflüsse, Realisierungschancen, SWP-Studie 13 (Berlin: Stiftung Wissenschaft und Politik2001) particularly p.7.

57. L. Shevtsova, Between Stabilization and a Breakthrough: Interim Results of VladimirPutin’s Presidency, Moscow Carnegie Centre Briefing Papers 4/1 (2002), available at<http://www.carnegie.ru>.

58. ‘Speech by Russian President Vladimir Putin at the Meeting with the Canadian Prime Min-ister and Canadian Businessmen at the Luzhniki Palace of Sports, Moscow, 15 February2002’, Daily News Bulletin of the Ministry of Foreign Affairs of the Russian Federation,18 February 2002, available at <http://www.mid.ru>.

59. Interview with Vladimir Putin of 13 December 2002, published in the Financial Times, 17December 2001.

60. O. Alexandrov and A. Makarychev, On the Way to Globalization: Administrative andNetworking Strategies of Russia’s Regions, Regionalization of Russian Foreign andSecurity Policy Project, Working Paper 19 (Zurich: Centre for Security Studies and ConflictResearch, March 2002) pp.25–31, available at <http://www.fsk.ethz.ch/documents/WorkingPapers/wp19.pdf>.

61. ‘Mikhail Prusak kritikuet prezidenta’, Pravda.Ru, 26 October 2001. 62. O. Rodin, ‘Envoy Disappoints Local Crowd’, RFE/RL Russian Political Weekly 2/21

(2002), available at <http://www.rferl.org/rpw>. 63. Alexandrov and Makarychev (note 60) pp.25–31. 64. See for further reading: N. Petrov, ‘Seven Faces of Putin’s Russia: Federal Districts as the

New Level of State-Territorial Composition’, Security Dialogue 33/1 (2002) pp.73–91. 65. Putin’s annual address of 18 April 2002: ‘Poslaniya Prezidenta Rossiiskoi Federatsii V. V.

Putin Federal’nomu Sobraniyu Rossiiskoi Federatsii’, Moscow, 18 April 2002, available at<http://www.president.kremlin.ru/events/510.html>.

66. Press conference with Moscow Carnegie Centre Official Andrei Ryabov on President Putin,23 April 2002, available at <http://www.carnegie.ru>.

67. Reddaway quoted from: J.A. Corwin, ‘The Presidential Envoys and Mission Creep’, RFE/RL Russian Political Weekly 2/15 (2002), available at <http://www.rferl.org/rpw>.

68. Satarov quoted from E. Schneider, Das innenpolitische ‘System’ Putins, SWP-Studie 25(Berlin: Stiftung Wissenschaft und Politik 2001) pp.21–2.

69. Igor Lekushov, quoted from: S. Ageev and A. Krylov, ‘U semi nanek . . .’, Ekspert Severo-Zapad, 18 June 2001, p.30.

70. The ‘North-West’ Centre for Strategic Research (Tsentr Strategicheskikh Razrabotok‘Severo-Zapad’) is a semi-official think tank linked to German Gref’s Moscow based‘Centre for Strategic Research’. The ‘doctrine’ can be found on the Centre’s Internet site at<http://www.csr-nw.ru>.

71. E. Ozerova, ‘Razvitie regiona tak vozmozhno: No poka ves’ma slozhno’, PeterburgskiiChas pik, 18 July 2001, p.5.

72. Evdokimov quoted from: O. Dramaretska, ‘Osmyslit’ ee nereal’no’, Kommersant’’ S-Peterburg,5 April 2002.

73. The text can be found online at <http://www.csr-nw.ru/docs.php?page=strategy&code=x>. 74. Cherkesov quoted from A. Gritskova, ‘Mechta prekrasnaya, eshche neyasnaya’, Peterburg-

skii Chas pik, 11 April 2002 (Internet edition). 75. Mikhailov quoted from ibid. 76. For more information and discussion material in the Volga Federal District, see, for example,

the web site of the Centre for Strategic Analysis of the Volga Federal District at <http://okrug.metod.ru> or <http://www.sfo.ru>. For further links and regional Internet resourcessee <http://www.regions.ru>.



77. A good overview on the Russian regional discourse and the distinction between the conceptsof ‘hard’ and ‘soft’ regionalism is offered in A.S. Makarychev, Ideas, Images and TheirProducers: The Case of Region-Making in Russia’s North West Federal District, COPRIWorking Paper 24 (Copenhagen: Copenhagen Peace Research Institute 2002).

78. In a survey conducted in November 2000, only 24 per cent of those surveyed said theywould regard the federal districts as a useful institution. In June that same year, the figurewas still 44 per cent. See Y. Leveda, ‘The Year of Symbolic Order’, Russia on Russia:Administrative and State Reforms in Russia (2001) (Internet edition).

79. I.M. Busygina, ‘Das Institut der Vertreter des Präsidenten in Russland: Probleme desWerdegangs und Entwicklungsperspektiven’, Osteuropa 46/7 (1996) pp.664–95; N. Petrov,‘The President’s Representatives: “Moscow’s Men” in the Regions’, The Jamestown Prism4/7 (1998), available at <http://russia.jamestown.org>.

80. The results of these polls can be found in A. Duka, ‘Institut polnomochnogo predstavitel’yaPrezidenta RF v Severo-Zapadnom federal’nom okruge’, paper presented at the conferenceon the Seven Federal Districts, organised by the George Washington University and theEastWest Institute on 22–23 March 2002 in Washington, DC, p.6.

81. The results are published in Kommersant” vlast’, 6 February 2001, pp.15–18 and Kommersant”vlast’, 13 February 2001, p.15.

82. More on the new law: A. Lyubarev, ‘Gotovyatsya novye pravila dlya regional’nykhvyborov’, Rossiiskii regional’nyi byulleten’ 4/4 (2002) (Internet edition).

83. V. Gel’man, ‘The Future of Regional Electoral Reform’, Russian Regional Report, 6/33(2001), available at <http://www.isn.ethz.ch/researchpub/publihouse/rrr/>.

84. P. Isaev, ‘Kremlin Seeks to Move Regional Legislatures from Governors’ Control’, RussianRegional Report 6/26 (2001), available at <http://www.isn.ethz.ch/researchpub/publihouse/rrr/>.

85. Vremya novostei, 19 February 2001. 86. V. Spiridonov, ‘Poslednie dary morya’, Itogi, 13 March 2001, pp.32–7. 87. As a general reference, see E. Schneider, Die örtliche Selbstverwaltung in der Russländis-

chen Föderation, Berichte des Bundesinstituts für ostwissenschaftliche und internationaleStudien 15 (Cologne: Bundesinstitut für ostwissenschaftliche und internationale Studien1998).

88. ‘Dmitrii Kozak: Reforma samoupravleniya ne tekushchaya, a strategicheskaya zadacha’,Strana.Ru, 28 January 2003, available at <http://www.strana.ru>.

89. R. Orttung, ‘Economic, Political Resources Increasingly Concentrated’, Russian RegionalReport 7/2 (2002), available at <http://www.isn.ethz.ch/researchpub/publihouse/rrr/>.

90. I. Malyakin, ‘Putin Against the Regions, Round Two’, The Jamestown Russia & EurasiaReview 1/2 (2002) pp.4–6, available at <http://russia.jamestown.org>.

91. The draft laws have been delivered by President Putin to the State Duma on 4 January 2003.After some considerable amendments, the two bills were approved by the State Duma on11 June 2003 (note 47).

92. Putin’s annual address of 18 April 2002 (note 65). 93. Russian Regional Report 7/1 (2002), available at <http://www.isn.ethz.ch/researchpub/

publihouse/rrr/>. 94. Russian Regional Report 7/5 (2002), available at <http://www.isn.ethz.ch/researchpub/

publihouse/rrr/>. 95. Arkadii Kazantsev, quoted from: R. Orttung, ‘Putin Faces Difficult Task in Reforming

Local Government’, Russian Regional Report 6/8 (2002), available at <http://www.isn.ethz.ch/researchpub/publihouse/rrr/>.

96. This can be seen not only from the various statements made on this issue, but also from thefact that under the law approved in summer 2000, ‘On the general principles of the organisa-tion of local self-government’, the governors and republic presidents are generally permittedto dismiss local self-government heads if they breach federal law. However, the law alsoincludes an important restriction, in that mayors of regional capitals can be dismissedonly by the president of the Russian Federation. The text of the law has been published in:Rossiiskaya gazeta, 8 August 2000.

97. S. Sarychev, ‘Mery prinyali reshenie o sozdanii assotsiatsii gorodov Tsentral’nogo federal’nogookruga’, Rossiiskii regional’nyi byulleten’ 4/4 (2002) (Internet edition).


36 GEOPOLITICS

98. R. Orttung, ‘Luzhkov in Putin’s Russia: Cutting the Mayor Down to Size’, Russian RegionalReport 6/19 (2001), available at <http://www.isn.ethz.ch/researchpub/publihouse/rrr/>.

99. A. Lyubarev, ‘Mestnoe samoupravlenie v Moskve budet vvodit’sya bez speshki’, Rossiiskiiregional’nyi byulleten’ 4/5 (2002) (Internet edition).

100. HOrttung, ‘Putin Faces Difficult Task in Reforming Local Government’ (note 95). 101. Tsentr Strategicheskikh Issledovanii, Na poroge novoi regionalizatsii (note 36). 102. Strana.Ru, 24 April 2001, available at <http://www.strana.ru>. 103. Daniel Treisman, ‘Russia Renewed?’ Foreign Affairs 81/6 (2002) p.60. 104. See N. Zubarevich, ‘Izmeneniya roli i strategii krupnogo biznesa v regionakh Rossii’, in

N.Ju. Lapina (ed.), Regional’nye protsessy v sovremennoi Rossii (Moscow: INION RAN1999) pp.72–88.

105. P. Isaev, ‘Svarshchivanie ‘oligarchov’ i regional’nykh vlastei: Nachalo novoi oppozitsiiKremlyu?’ Rossiiskii regional’nyi byulleten’ 4/1 (2002) (Internet edition).

106. See Stoner-Weiss (note 23) pp.37–40 42. 107. N. Lapina and A. Chirikova, Regional’nye elity RF: modeli povedeniya i politicheskie orien-

tatsii (Moscow: INION RAN 1999) pp.85–94. 108. I am grateful to Robert Orttung for allowing me to use some of his findings for the typolog-

isation of regions presented in the following. I draw here mainly on Orttung’s paper ‘Busi-ness and Politics in the Russian Regions’, which he presented at the November 2002AAASS Annual Conference in Pittsburgh, PA.

109. ’The Rise of the Extractive Industry Executive’, RFE/RL Russian Political Weekly 3/1(2003), available at <http://www.rferl.org/rpw>.

110. ‘Russische Ambivalenz gegenüber Ausländern: BP-Investition als Zeichen eines fundamen-talen Wandels?’ Neue Zürcher Zeitung, 14 February 2003, p.19.

111. N. Zubarevich, ‘Krupnyi rossiiskii bizness na regional’nykh vyborakh’, Rossiiskiiregional’nyi byulleten’ 4/2 (2002) (Internet edition).

112. According to the new law, a merger of ‘subjects of the Russian Federation’ to form a newregion is conditional on a positive outcome from a referendum in which the population ofthe regions affected is asked to vote on amalgamation, and on the merger being approved byat least two thirds of the members of the State Duma and three-quarters of the members ofthe Federation Council.

113. I. Malykin, ‘Reforming the Russian Federation: From 89 to 89’, RFE/RL Russian PoliticalWeekly 3/5 (2003), available at <http://www.rferl.org/rpw>.


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